Summary of this article
Complaints around insurance mis-selling rose by 11.2 per cent year-on-year in Q2 2025, while the total value of disputed claims climbed nearly 10 per cent, according to the latest Insurance Samadhan report. The findings show that health insurance remains the most grievance-heavy category, followed by life and general insurance. Endowment policies continue to emerge as the most mis-sold products, leaving consumers exposed to losses.
Insurance grievances related to claim rejections and mis-selling of policies is becoming more frequent in India's insurance market. The disputes are on the rise again. The recent new trends report by Insurance Samadhan for Q2 2025, an insurance grievance redressal platform, finds that there's been an 11.2 per cent year-on-year increase in complaints related to mis-selling. The total value of claims under dispute has gone up by nearly 10 per cent in the same period.
The report, which studied 4,004 cases worth about Rs 75.4 crore, shows that more policyholders are pushing back against unfair practices. Compared to the previous quarter, complaints have surged sharply, up 45 per cent, with disputed claim values jumping from Rs 83.5 crore in Q1 to more than Rs 119.5 crore in Q2 this year.
Health insurance continues to be at the centre of most grievances, accounting for over two-thirds of all complaints. Life insurance comes next at just over a quarter, while general insurance has a much smaller share.
Endowment policies have once again emerged as the most mis-sold products. Buyers often discover later that these policies deliver far lower returns than promised and can even lead to penalties or capital erosion.
The report also throws light on who is raising their voice. People in the 31 to 40 age group were the most active in filing complaints, and among states, Uttar Pradesh topped the list with the highest number of cases.
This is not a new story for the insurance sector. Mis-selling has long been a sore point, particularly in life insurance. The Insurance Regulatory and Development Authority of India (Irdai) has also raised concerns over the high commissions and distribution expenses in the insurance sector.
According to a source-based report by CNBC-TV18, the regulator has asked companies to consider a framework similar to mutual funds' Total Expense Ratio (TER).
Irdai data shows that in 2022-23, around one in every five complaints against life insurers was related to mis-selling, and many of those involved private insurers.
The common thread in such mis-selling practices is often the same: products are pushed aggressively for commissions or to meet sales targets, with policyholders left holding contracts they don't fully understand or need.
However, such a rise in complaints this year shows that insurance policyholders are getting more aware, with many choosing to challenge insurers when they feel wronged.
But the numbers highlight the growing problem of mis-selling, particularly in insurance categories like endowment where marketing promises and actual returns rarely match for the policyholders.
